In my experience when it comes to Google AdSense, the more ads the better. On the flip side the more non-Google ads there are on a site the worse Google AdSense does as the other ads drain off clicks that AdSense might otherwise get.

I must say that having fewer ads works best for me. Only aprox 20% of the pages on my website carry ads. I limit each of those pages to one block per page.

Scurra:

I am also struck by the "Pareto Principle" - about 20% of my pages generate 90% of the clicks. Now I am wondering whether I should remove the Adsense ads from 80% of the pages and risk a 10% decrease in clicks (and income)? Will the improved performance increase EPC by 10% or more? Or will it be better to keep all the ads, hoping for that odd click every once in a while?

"My thinking is that Google gives the highest paying bidders the top positions"

Not really.. IMO, Google will place the ads with the maximum aggregate of ( CTR X CPC ) in top positions. They want to maximize your and their revenue. So you could land up with most of the MFA's ( if you are not vigilant).

Generally MFA's will outscore genuine high EPC ads because their higher CTR will make more money for Google.

Sad but true.

You need to rethink your strategy and combine it with filtering and careful tracking to be successful.

At times, your strategy will work very well...but for me, there have been major problems with this approach. I now try and find a balance.

I had only 350x250 block on one of site. Few days back I had added 790 and 480 AS ads and I am my earnings are up :)

mzanzig,
Removing the lower performing ads does seem to increase my EPC in varying degrees. To answer your question; in my case, the gains in improved performance usually does cover the loss incurred by having fewer ads.

I will usually shut down a page if an ad block starts performing badly in both epc payout and ctr. So if a single adblock has earned (say for example) $20 on a given day I will not shut it down simply because it average epc seems a little too low,

The decision whether a page is performing well or not for me also depends on whether the page is one of my 'main' pages or one that normally enjoys fewer visits. However If a page is showing a fairly weak ctr and is earning well on an average epc basis, then I will allow it to remain also.

These rules are based on my own obsevations regarding what has worked for me in a historical sense, so there is no exact science here. One thing I have found for certain and that is that some ad blocks will perform better precisely at a time whilst other ad blocks start to deterioate in performance. The strange aspect to all this, is that it happens with the same set of ads and performance swings can sometimes occur on a daily basis. So how do all the current theories regarding smartpricing apply here?

It's certainly worth setting up multiple channels, so you can see which ads work - I've found on one site that virtually all the clicks come on the left hand tower, virtually none on the top banner - so I've been able to remove the banner, making a slightly 'cleaner' page, with no noticeable drop in income.

That result surprised me, but whichever it is, I hope to lose at least one block / link unit per page (on pages where I have 2 or 3).

Like many, I worked on the premise that more earns more - but that ain't necessarily so, and for many visitors, fewer ads is a definite plus, with links and conversions possibly more likely.

I have found that less can be much more.

If you clutter your site with ads, people will become blind to them.

You also run the risk of a lot of non-relevant ads, depending on your content.

I like a nice clean layout that loads fast, and is easy to navigate. Maybe it's just me, but I have noticed that when I move to a cleaner, faster-loading layout, etc., my earnings go up.